Bank of England had 28 ‘major’ compliance breaches in a year but ‘good progress’ made

The public spending watchdog has found dozens of “major” compliance breaches at the Bank of England over the course of a year, despite it taking steps to address shortcomings.

The report from the National Audit Office (NAO) comes as part of its review into the Bank’s risk management and compliance practices following two high-profile scandals.

In 2017, Charlotte Hogg resigned after less than two weeks as the Bank’s deputy governor because she failed to properly declare that her brother worked for Barclays.

A security breach two years later saw hedge funds given early access to audio streams of the Bank’s press conferences, raising fears that traders had an advantage.

The NAO found there were 628 “minor” compliance breaches at the Bank in the 12 months to last August, which can include sending emails to the wrong person.

It unearthed 28 “major” breaches, which it said can include “senior level conflicts that materially affect an official’s independence but have not been disclosed”.

The NAO acknowledged that since the embarrassments in 2017 and 2019, the Bank had “made good progress” on improving its compliance practices, including using more training and workshops to foster “a culture of risk awareness among staff”.

It added that the Bank’s management had “aimed to take a proportionate response to breaches, to create a healthy and open culture where staff are more likely to report incidents or concerns”.

However, a survey of the Bank’s staff found just 59 per cent felt they could openly raise issues without fear of “negative consequences”.

In contrast, the NAO said a Whitehall survey of civil servants showed more than three-quarters felt they could speak openly.

David Roberts, chair of the Court of the Bank of England, said: “We welcome the National Audit Office’s report on the Bank’s management of legal, ethical and staff compliance risks. The Bank is committed to promoting the highest standards of integrity and ethics and will carefully consider the NAO’s recommendations.”

Meg Hillier, chair of the Public Accounts Committee, commented: “The Bank of England relies on public trust and its reputation for integrity to carry out its role. However, past incidents at the Bank and other public bodies have shown how failure to demonstrate integrity can harm an organisation’s credibility and reputation.”